Chart Signals: US Dollar rallies, index rebound fades fast

04:45, 16 August 2017
· By Colin Cieszynski

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The big bounce in indices appears to be coming to an end nearly as fast as it started with broken support levels becoming resistance and the US 30 struggling with 22,000. The USD strengthened against everything, sending gold and resource dollars like AUD, NZD and CAD lower. JPY continued to weaken while soft UK inflation put GBP under pressure.

Asia Pacific Indices

Australia 200 is still stuck in a sideways range between 5,655 and 5,800 recently trading near 5,750. RSI sitting on 50 confirms sideways momentum.

Japan 225 continues its rebound with support rising toward 19,700 from 19,500. The index is testing 19,795 a Fibonacci level with next potential resistance at its 50-day average near the 20,000 round number. RSI indicates downward pressure easing.

US 30 failed to hold above 20,000 after running into resistance near 20,070. RSI peaking at a lower high indicates upward momentum weakening. Next support in a pullback possible near 21,900 then 21,780.

US SPX 500 is still bouncing back with the index climbing back up into the 2,462 to 2,467 area from the 50-day average near 2,445. Resistance remains in place near 2,475 then 2,482. RSI back above 50 signals a rebound underway.

US NDAQ 100 has regained 5,900 but the momentum of the current upswing has already started to slow down with the index and the RSI setting lower highs. Initial resistance appears near 5,955 with initial support in a downturn near 5,855.

UK 100 failed to hold 7,400 and has dropped back into the lower half of a 7,300 to 7,500 trading range following a test of an old support line as new resistance. An attempt to break out didn’t get very far with the index peeking up toward 7,420 then turning downward.

Germany 30’s rebound has stalled short of 12,240 a Fibonacci level and previous breakdown point with the index dropping back toward 12,180. Meanwhile, its RSI remains below 50 indicating that the broader downtrend remains intact through the recent trading bounce. Next support possible near 12,160 then 12,090.

Commodities

Gold is rolling over and appears to be forming a triple top near $1,300. Following a break of $1,285, the metal price dove down toward $1,268 with next support at the 50-day average near $1,262 before bouncing back up toward $1,275 where resistance has come in at a lower level. RSI falling toward 50 confirms upward momentum fading and confirmation of a downturn pending.

WTI crude oil may be bottoming out with a hammer candle forming out of a bear trap dip under $47.50 toward $46.95 and back. RSI slipping under 50 signals momentum turning back downward with next support near $46.70 a Fibonacci level.

FX

US Dollar Index is on the move upward, testing 73.80 where a breakout would complete an ascending triangle base and signal the start of a new uptrend. Next potential resistance near 94.10 then 95.00 as support moves up toward 93.50. RSI approaching 50 from below where a breakout would confirm the upturn.

EURUSD still appears to be forming a top with a bearish descending triangle forming between $1.1700 and $1.1900. Lower highs in the pair and RSI indicate emerging distribution. Next support possible near $1.1500 where a measured move, round number and the 50-day average converge.

GBPUSD is breaking down today, falling away from $1.2970 former Fibonacci support, down through its 50-day average near $1.2930 then on toward $1.2865. RSI under 50 and falling confirms increasing downward momentum. Next support possible near $1.2840 then $1.2800.

NZDUSD is breaking down today, taking out $0.7275 a Fibonacci level to signal the start of a new downleg. RSI under 50 and falling confirms increasing downward momentum. Next potential support appears near $0.7190 a 50% retracement of the previous uptrend.

AUDUSD is under pressure today, falling from $0.7870 down into the $0.7800 to $0.7825 area with next potential support at the 50-day average near $0.7740. The RSI has broken under 50 to signal a downturn in momentum.

USDSGD is breaking out of a base today! The pair has cleared $1.3655 to signal the start of a new uptrend, confirmed by the RSI breaking out over 50. Next potential resistance appears at the 50-day average near $1.3735.

USDJPY is breaking out of a downtrend today, retaking 110.00 which may become support and advancing on 110.45. Next potential resistance appears near 110.60 then 111.00. RSI advancing on 50 where a breakout would confirm an upturn in momentum.

GBPJPY is attempting to stabilize above its 200-day moving average and in a Fibonacci trading channel between 141.85 and 143.30. RSI suggests downward pressure is starting to ease but it’s unclear if this is a base forming or a pause within a bigger downtrend.

EURJPY is sending mixed signals as it bounces around between 128.00 and 131.45. An ascending triangle has failed, resistance has moved down to the 130.00 round number and an old trend support line has become an obstacle. On the other hand, the pair bounced off its 50-day average and the RSI has regained the 50 level.

USDCAD has broken through $1.2750, a 23% retracement of its previous downtrend to the start of a new upleg with next resistance at the 50-day average near $1.2880. Support rises toward $1.2720 from $1.2645. RSI regaining 50 confirms momentum turning upward.

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